GREENWOOD VILLAGE, CO-Plans for Palazzo Verdi, a 312,000-sf, 15-story speculative office-over-parking building, are under way in Southeast Denver, an area not known for sprouting high-end office buildings.

In addition to being the first high-end office building southeast Denver has seen since Hines completed 4600 S. Syracuse nearly eight years ago, Palazzo Verdi is also hoping to obtain its silver LEED certification.

The 15-story building, which is composed of 10 stories of office atop five stories of parking, is being marketed as a “class AA” building, according to brokers associated with the project.

“In Denver you’ve got a number of suburban office buildings that are mid- or low-rise from the last generation that are considered class A,” Scott Perry, vice president of Colliers Bennett & Kahnweiler, an affiliate of Colliers International, tells “But they don’t have the amenities or aesthetics that projects that we now classify as ‘class AA’–like Palazzo Verdi–do.”

Class A office space has been filling up in the Denver region, which posted a vacancy rate of 13.8% at the close of the second quarter of 2006, according to Grubb & Ellis. Since then, rental rates have risen, the vacancy rate has fallen to around 8.8% and leasing rates have expanded by 18%, cites Bob Whittelsey, senior vice president of Colliers Bennett & Kahnweiler who is handling Palazzo Verdi’s leasing.

“We’re seeing tremendous activity and solid absorption,” he says. “Last year the Southeastern suburb had 1.1 million sf of absorption, and during the last cycle we already had speculative construction occurring when [the region] hit 10% vacancy.”

Palazzo Verdi, which broke ground Feb. 16, is being developed by the John Madden Co., designed by Fentress Bradburn Architects and built by Peter Kiewit Sons. It will feature a large grand entry lobby, views from every floor (due to the office portion beginning on the sixth floor), state-of-the-art building systems, access to the Light Rail and attached covered parking, among other amenities.

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